New homes sales slow

Sales of new homes lifted in March but were generally slow over the first months of 2024, new research shows.

The latest edition of HIA’s monthly New Home Sales report shows that despite rising 4.9 per cent between February and March, sales remained flat in the first three months of 2024 compared with the previous quarter.

New home sales in March actually only declined in New South Wales (albeit by a whopping 21.6 per cent). The rest of the large states saw monthly increases, led by South Australia (up 14.2 per cent), followed by Western Australia (10.3 per cent), Victoria (10.1 per cent) and Queensland (2.3 per cent).

Sales in the three months to March 2024 increased compared to the previous year in Queensland (up by 41.0 per cent), Western Australia (25.6 per cent), New South Wales (21.3 per cent) and South Australia (4.4 per cent). Victoria was flat over the same period.

HIA Senior Economist Tom Devitt, however, suggests that there is an increasing divergence in sales volumes at state level, noting that those markets with higher land prices endure a larger downturn in home sales.

“Sales in New South Wales and Victoria in the first three months of 2024 remain down significantly compared to recent years, including sales falling by 48.7 per cent and 32.7 per cent respectively, against the the same quarter in 2019”, he said.

“The higher land costs in New South Wales and Victoria is the principal reason why sales in these markets are more significantly affected by the rise in the cash rate.

“Lowering the cost of delivering new homes to market is essential to achieving the Australian government’s target of 1.2 million new homes over the next five years”, Devitt concluded.